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Minimum Wage - What You Need to Know

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The minimum wage in the U.S. is the minimum required to be paid to most workers. The Department of Labor (DOL)oversees the minimum wage laws. The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009. Here is a history of the minimum wage rates, from the DOL.

 

State Minimum Wage Laws
Many states also have minimum wage laws. If the state law and the federal law conflict, you must use the minimum wage rate that is highest.

What are "Covered Workers?"
There are two ways an employee can be "covered:" either because the employee works for a large company ("enterprise coverage") or because the employee is engaged in "interstate commerce" or in making goods for commerce. Since most employees work for a business that engages in commerce, most employees are "covered" and must be paid minimum wage. Even a janitor who works in a building where goods are produced is considered to be covered, as are most domestic workers (housekeepers, nannies, etc.)

Younger Workers
The DOL specifies that, "A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers."

Minimum Wage for Tipped Employees
Employees who receive tips may be paid a lower minimum wage (but not less than $2.13 an hour), and their tips and wages should equal the federal minimum wage amount.

Minimum Wage Enforcement
The Wage and Hour Division of the Department of Labor is responsible for enforcing the federal minimum wage laws. They can audit your business to assure that you are paying the minimum wage to employees.

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